AT&T buys Verizon’s spare 4G spectrum so it can soup up its LTE networks

Verizon Wireless(s vz)(s vod) is making good on its promise to the FCC to return its extraneous 700 MHz to the market, and the principle buyer turns out to be the country’s other mega-carrier, AT&T(s t). Verizon will give AT&T 39 lower-700 MHz licenses in some of the country’s biggest cities in exchange for $1.9 billion in cash and four licenses in an alternate 4G band.

So it should come as no surprise that cities topping the sales receipt are Chicago, LA and all of the other markets where AT&T doesn’t have a full complement of 4G airwaves. AT&T will now be able to normalize its LTE bandwidth in all of the country’s major cities before it even has to start thinking about its next stage LTE deployment. Speaking of which, AT&T just closed its purchase of NextWave’s Wireless Communications Service (WCS) airwaves this week, which will give it the frequencies to deploy an entirely new LTE network in the 2.3 GHz band.

Verizon not only comes out of this with almost $2 billion, but it gets some key licenses in the Advanced Wireless Services (AWS) band, which is where Verizon plans to deploy phase 2 of its own LTE network (the current 4G rollout is in the upper 700 MHz). Specifically it’s getting 10 MHz spectrum in Los Angeles; Phoenix; Fresno, Calif.; and Portland, Ore.

Verizon also announced it is selling 700 MHz licenses to private equity firm Grain Management for $189 million in the North Carolina markets of Charlotte, Greensboro and Raleigh-Durham. It will also lease an AWS license from Grain in Dallas.